American Iron and Steel Institute Strongly Supports the Currency Reform for Fair Trade Act of 2009 (CRFTA)

May 13, 2009

CRFTA, introduced today, has strong bipartisan support

The American Iron and Steel Institute (AISI) joined other organizations in voicing strong support for the Currency Reform for Fair Trade Act of 2009 (CRFTA), which was introduced today.   The CRFTA builds on, refines and streamlines earlier proposals made in the 109th and 110th Congresses, and would establish an effective trade remedy provision to neutralize currency undervaluation.

“AISI commends Senators Debbie Stabenow (D-MI), Sherrod Brown (D-OH) and Jim Bunning (R-KY), and Congressmen Tim Ryan (D-OH) and Tim Murphy (R-PA) for reintroducing the Currency Reform for Fair Trade Act, a critical step toward leveling the playing field for American manufacturers,” Thomas J. Gibson, president and CEO of AISI, said. “Currency manipulation by foreign governments has contributed to persistent and serious global structural imbalances and, in turn, to the current world economic crisis. It has led to enormous U.S. manufacturing job losses and provides a huge unfair – and artificial – competitive advantage.”

“Prompt enactment of this new and streamlined trade remedy bill is urgently needed to address this significant problem,” Gibson continued. “We are thankful to the growing list of Members who have joined as co-sponsors, and we urge Congress to enact it into law.”

The find out more about the CRFTA, see below.

AISI serves as the voice of the North American steel industry in the public policy arena and advances the case for steel in the marketplace as the preferred material of choice.  AISI also plays a lead role in the development and application of new steels and steelmaking technology.  AISI is comprised of 24 member companies, including integrated and electric furnace steelmakers, and 138 associate and affiliate members who are suppliers to our customers of the steel industry.  AISI's member companies represent approximately 75 percent of both U.S. and North American steel capacity.  For more news about steel and its applications, view AISI’s Web site at www.steel.org. 

 

Currency Reform for Fair Trade Act 2009 - The Facts

Countries that manipulate their currency are given unfair trade advantages. Specifically, China’s currency manipulation has run up a $1.4 trillion trade surplus with the U.S. since 2001.

Like previous bills, this bill would target nations, such as China, that manipulate their currency values to receive export and manufacturing advantages. However, the Currency Reform for Fair Trade Act of 2009 (CRFTA) departs from previous bills by focusing only on the trade aspect of currency misalignment. The CRFTA will:

  • Ensure that standard, World Trade Organization (WTO)-consistent trade remedies are available to complement the diplomatic process from a monetary standpoint under the Omnibus Trade and Competitiveness Act of 1988.
  • Direct the U.S. Department of Commerce to measure whether a country’s currency is fundamentally misaligned. These calculations will be public and will us reliable, public data available from the IMF as well as the two primary methodologies and guidelines that the IMF follows in its computations of exchange-rate misalignment.
  • Clarify that any foreign government’s undervaluation of its currency by means of such intervention can be offset by means of either countervailing duties or antidumping duties. Consistent with WTO rules these remedies are imposed only when the U.S. International Trade Commission determines that the unfair practice has caused or threatens to cause material injury to U.S. companies and workers. It is the effect or impact of the exchange-rate misalignment, not the foreign government’s purpose or intent underlying this policy, that is controlling as far as the WTO’s agreements are concerned.
  • Consistent with WTO rules, direct the U.S. Department of Commerce to treat currency undervaluation as a prohibited export-contingent subsidy. The text of the WTO’s Agreement on Subsidies and Countervailing Measures and related jurisprudence support the conclusion that undervaluation of a currency through a government’s protracted, large-scale intervention in exchange markets constitutes a prohibited, countervailable export subsidy.
  • Consistent with WTO rules, alternatively provide that when calculating dumping margins adjustments will be made to the foreign exporter’s U.S. price to offset undervaluation. Also consistent with the WTO’s standards, imposition of only one or the other remedy of countervailing and antidumping duties will be allowed. Existing U.S. law prohibits such “double-counting,” that is, the simultaneous application of countervailing and antidumping duties to counter the same export subsidy.

Source: Fair Currency Coalition. For more information, visit www.faircurrency.org.

Contact:
Nancy Gravatt
Vice President, Communications
American Iron and Steel Institute
Tel: 202.452.7115